Very strange. To that fast-developing scandal at the irs. The justice department opened a criminal probe, the fbi investigating now and abc's pierre thomas is in washington with the latest. Reporter: Today the fbi is launching a team to investigate the irs. And what began as a political scandal has taken a serious turn that could lead irs officials in jail for violating the civil rights of taxpayers. Overnight the irs acknowledged some of its actions were inappropriate but said it never intended to hide the issue that some were targeting tea party members. That statement is not stopping a widening probe. In a surprise move, attorney general eric holder revealed he's already launched a criminal investigation. The fbi is coordinating with the justice department to see if any laws were broken. I think everyone can agree if not criminal, they were certainly outrageous and unacceptable. Reporter: A criminal probe means irs officials in cincinnati, california and washington, d.C., Now face fbi agents showing up at their officeto interrogate them. Their telephone records and e-mails could be subpoenaed. That's going to change, i think, probably the day-to-day working of a lot of people at the irs. Reporter: The new inspector general's report released late tuesday blasts the irs for unfairly targeting conservative groups concerning their tax-exempt status much the report suggests a lack of oversight at the highest levels calling some employees ignorant of tax laws. Overnight president obama said he read the report issuing a statement calling the irs actions intolerable and inexcusable. Meantime, on capitol hill, outrage. This looks like a blatant abuse of power on the part of the irs and it suggests to me there is a culture of rottenness. Reporter: But some in the gop don't trust holder to investigate. They want a special counsel to pursue this case, geor they are holding 9 hearings friday. Pierre, thanks. To that developing spy story

This transcript has been automatically generated and may not be 100% accurate.

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